United Airlines and maintenance workers' union pause contract talks

(Reuters) - United Continental Holdings Inc and its maintenance workers’ union said on Friday that they paused talks on a new contract after a rival airline tentatively agreed to a wage increase.

United said in an online message to employees that it met with the International Brotherhood of Teamsters for the last two weeks and made headway on healthcare, sick time and hours of service. The message, posted on unitednegotiations.com, said the company offered significant pay increases, but a deal that the Teamsters reached Wednesday with American Airlines Group Inc “reset the market.”

Chicago-based United is assessing how that deal, which increased pay for American’s passenger service agents, affected industry wages, the message said. It will reconvene talks with the Teamsters in two weeks.

The pause reflects the company’s challenge in reaching labor deals and integrating its workforce since United and Continental merged in 2010. Each still has its own contracts with flight attendants and maintenance technicians.

“Delta and American are setting the pace, and United is dragging its feet,” Teamsters negotiator Clacy Griswold said in a news release. “We hoped to see a change in the airline’s attitude toward its workers under the new leadership of CEO Oscar Munoz, but that has yet to be seen.”

Last month, Munoz took the helm of the second-largest U.S. airline by capacity. Chief Executive Officer Jeff Smisek resigned because of internal and federal investigations into the carrier’s relationship with the Port Authority of New York and New Jersey.

The probes have focused on whether United added direct flights to Columbia, South Carolina to curry favor with the Port Authority’s then-Chairman David Samson, who had a home there, a source familiar with the matter said.

Munoz has called a summit of United’s union leaders for Oct. 15 and has made a point since taking the job of listening to customers and meeting with workers to hear their feedback on the airline.